Is Leonardo DRS, Inc. overvalued or undervalued?

As of 8 September 2025, the valuation grade for Leonardo DRS, Inc. has moved from fair to attractive, indicating a more favorable assessment of its market position. The company appears to be undervalued, particularly when considering its P/E ratio of 49 compared to the peer average of approximately 43.14, and an EV to EBITDA ratio of 28.96, which is higher than the industry average. Additionally, the PEG ratio stands at 1.96, suggesting that the stock may be undervalued relative to its growth expectations.
In comparison to its peers, Textron, Inc. has a P/E of 17.37, and Huntington Ingalls Industries, Inc. has a P/E of 27.01, both of which are significantly lower than Leonardo DRS, Inc. This highlights the potential for growth in Leonardo DRS, Inc. despite its current valuation metrics. Notably, the company has outperformed the S&P 500 with a year-to-date return of 31.79% compared to the index's 12.22%, reinforcing the attractiveness of its valuation.